When we think of the business of health care, we automatically think of the administrative and finance departments of hospitals and health care systems: That is where the business is accounted for, away from where the care is taking place.
At least, it was. No longer, though. Today, the health care landscape is shifting rapidly, and a fundamental redesign of the approach to the business of care and revenue cycle management is critical to financial solvency of health care organizations.
The changing health care landscape
It’s no surprise that the way we account for the business of care must change. The entire health care industry is moving from a fee-for-service model to a fee-for-value model, with new regulations and programs targeting health care organizations, physician groups and individual physicians. In 2015, the Department of Health and Human Services (HHS) announced measurable goals and a timeline to move the Medicare program and the health system at large toward paying providers based on the value of services rendered to a patient, rather than the quantity of services rendered. Additionally, in 2015, the Medicare Access and CHIP Reauthorization Act (MACRA) was passed, which mandated critical changes to Medicare reimbursement.
This has influenced how health care organizations are navigating through new reimbursement practices. Payers are insisting that providers take on significant risks, including bundled payments, hybrid payment models and capitation. With risk-taking, health care providers will become more frugal with their dollars. Commercial payers are following suit as they partner with the Centers for Medicare and Medicaid Services and accountable care organizations.
The financial solvency of health systems and physician practices is no longer a given. Balancing legitimate patient needs with a more restrained supply of services requires health care organizations to shift from focusing simply on the volume of services to the value of services – in other words, a dedication to value-based care.
The premise here is that a shift occurs more naturally when there is a financial risk for those providing excessive and unneeded services. It goes without saying that the greater the shift of financial risk to providers, the greater the potential savings to payers. As providers grapple with these shifts, there is a greater need to mitigate potentially negative consequences, such as short-term decisions that negatively impact patients over time. For example: Hospitals may discharge patients to meet payer requirements, and though the patient may meet the payer’s checklist for discharge, they may end up readmitted in a couple of days.
Increasingly, organizations are investing in population health as they are moving away from volume-driven practices and toward value-based care. The emphasis on better patient outcomes means that health care providers are identifying the most at-risk patient populations. Preventive and proactive care – particularly when it comes to at-risk patient populations – is critical for organizations who hope to succeed under value-based care.
Since clinical care generates most, if not all, the revenue for health care delivery organizations, it’s important that clinicians, nursing staff and ancillary providers understand the dynamics of this industrywide shift. However, until now, revenue cycle has typically been treated as a business function that excludes care delivery teams from discussions, processes and implementations. Individual physicians and other clinical staff are typically unaware of organizational imperatives, key performance indicators (KPIs) or how central their role is in the world of revenue cycle management. For health care organizations to remain financially solvent, this will have to change.
Engaged physicians are critical to a hospital’s bottom line
For physicians to become engaged with the business of care, organizations must undergo a paradigm shift from the usual revenue cycle management approach to the broader, more encompassing revenue integrity model.
Here’s what that means: HFMA defines revenue cycle as “all administrative, financial, and clinical functions that contribute to the capture, billing, collection, and management of patient service revenue.”
In an HFMA journal article, revenue integrity is further defined: “The revenue integrity model is formed by unity, cohesion, togetherness, and solidarity between clinical and business personnel ... In a traditional revenue cycle model, physicians are not engaged as active contributing members of the revenue cycle team. By contrast, under the revenue integrity model, physician engagement is fostered by the case manager and the clinical documentation specialist, who link the clinical and business domains to affect an outcome in which the patient receives care in the appropriate clinical setting while accurate documentation ensures the organization is paid appropriately.”
Why are physicians disengaged from the business of care and revenue cycle management?
To understand why physicians are disengaged from the business of care and revenue cycle management, we first need to understand the mindset of the average physician. In general, physicians are conscientious individuals whose primary goal for practicing the art of medicine is to relieve pain and suffering, assist in the healing process and help their patients live a healthier lifestyle. And since the business of medicine is generally not emphasized in medical schools, many physicians consequently have little knowledge of what keeps hospitals financially solvent.
It is no wonder then that we hear physicians say, “I just want to practice medicine” and have someone else deal with reimbursement. They have relegated revenue cycle management to the hospital’s administrative and financial departments and are mostly unaware of how their actions (or lack thereof) affect their organization’s reimbursement. On the flipside, to move things along quickly, revenue cycle professionals may fix physician documentation and coding errors without providing feedback, thereby perpetuating the cycle of claims denials and lack of physician accountability.
Additionally, few organizations have physician leaders at the table when crucial decisions are being made, yet these programs cannot be successful without the active participation and long-term commitment of physicians. Although there is a gradual shift in what constitutes a physician compensation package, many organizations are yet to incorporate quality metrics, costs and patient outcomes. Physicians therefore continue to be disconnected from the overall risks the hospitals have been compelled to undertake, which makes the business of care seem like a concern outside of their circle.
To address this disconnect, many health care organizations have taken a top-down approach by employing physicians and mandating tasks. The premise is that employed physicians can be told what to do. What is missing from this approach is the all-important aspect of getting physician buy-in: Indeed, many organizations have found out that employed physicians are not necessarily aligned physicians.
Shared purpose organizations: Getting the physician buy-in
So, how can a health care organization engage physicians? The revenue integrity approach is big on change management. For true hospital and physician alignment, the culture must be right – and that means leadership investment in a shared purpose organization.
I like to think of the 1964 story of President John F. Kennedy visiting a NASA space center: He reportedly came across a janitor mopping a floor and asked him: “What are you doing?” The man responded: “Well, Mr. President, I’m helping put a man on the moon.” The janitor had bought into NASA’s vision and actively did his part to make it happen. In a hospital setting, everyone – from the top down – needs to be committed to achieving a common goal and must feel like they are an essential part of that team.
Getting physician buy-in can be approached from three angles: people, process and technology.
Physicians’ attitudes toward the business of care and revenue cycle management won’t change unless the organization’s culture does. Leadership should deliberately campaign to identify, train, elevate, authorize and compensate physician leaders at different levels – that way, the cultural shift can start from within the core team.
There should also be the design of a collaborative, transparent governance structure, which deliberately includes physicians in the administrative and financial aspects of an organization. This is where the physician leaders come in: These individuals should be stakeholders in this governance structure, and their opinions at crucial decision-making meetings should be welcomed and embraced.
Finally, leadership should take a fresh look at the definition of physician “productivity.” To reflect the shift to value-based care, physician compensation packages and bonuses should be redesigned to include quality metrics, costs and patient outcomes. When onboarding new physicians, leadership should include an overview of the organization’s overall financial and revenue strategy – this should feel important from the moment they start working.
When done properly, these efforts should lead to better physician alignment. Aligned physicians are engaged, and engaged physicians approach their work with energy, enthusiasm, dedication and true commitment to the improvement of their organizations.
Change starts with the culture of an organization, but it doesn’t end there. Hospital leadership should take the revenue integrity approach, which includes motivated and involved physicians, but they also need to have clearly identified, documented and relevant KPIs so that the goal of the organization is understood at every level. Those KPIs should be shared with department chiefs, reiterated at physician monthly departmental meetings and detailed in monthly reports that drill down to why KPI targets are missed and offer feedback for improvement.
This strategy will help make physicians accountable and responsible for their missed KPIs – and the other side of that accountability requires support from the organization. Leadership should be prepared to provide support with physician documentation, International Classification of Diseases codes and informatics support staff. Additionally, leadership should consider training and ongoing support with the new value-based programs the organization has chosen to participate in.
Neither the people nor the processes in an organization can align without the proper technology. Leadership should invest in software solutions that integrate clinicals and financials, along with well-written analytics and reports. They should ensure that physicians are trained to use functionalities that assist in adequate charge capture.
To some, getting physicians involved in the business of care and revenue management is an uphill task. The good news is, it is doable – as long as it is pursued with patience and persistence in this new value-based health care environment.
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